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Petitioners, Present:

Quisumbing, J., Chairperson,
- versus - Carpio Morales,
Brion, and
Abad, JJ.
!ctober "#, #$$%
& ---------------------------------------------------------------------------------------- &



'his case concerns the (urisdiction o) Municipal 'rial Courts over actions
involving real properties *ith assessed values o) less than P#$,$$$.$$.

The Facts and the Case

+n this petition )or revie* on certiorari
petitioners see. to reverse
the Order
dated August /, #$$0, o) the egional 'rial Court 1'C2
o) 3ipolog Cit4, Branch %, in Civil Case 5675, )or annulment o) documents,
reconve4ance and recover4 o) possession *ith damages. 'he trial court dismissed
the complaint )or lac. o) (urisdiction over an action *here the assessed value o) the
properties is less than P#$,$$$.$$. Petitioners as.ed )or reconsideration
but the
court denied it.

!n August "$, "%%% plainti)) spouses 8eneroso and Aurelia 9ebe and their
daughter, :4dia 9ebe, 1the 9ebes2 )iled *ith the 'C o) 3ipolog Cit4
a complaint
against de)endants ;eronico 9evilla and 'echnolog4 and :ivelihood esources
Center )or Annulment o) 3ocument, econve4ance and ecover4 o) Possession o)
t*o lots, *hich had a total assessed value o) P%,%"$.$$, plus damages.
November #5, "%%% the4 amended their complaint
to address a deed o)
con)irmation o) sale that sur)aced in de)endant 9evilla=s Ans*er
to the
complaint. 'he 9ebes claimed that the4 o*ned the sub(ect lots but, through )raud,
de)endant 9evilla got them to sign documents conve4ing the lots to him. +n his
9evilla insisted that he bought the lots )rom the 9ebes in a regular

>hile the case *as pending be)ore the 'C, plainti)) 8eneroso 9ebe died so
his *i)e and children substituted him.
Parentheticall4, *ith de)endant ;eronico
9evilla=s death in #$$0, his heirs substituted him as respondents in this case.

!n August /, #$$0 the 'C dismissed the case )or lac. o) (urisdiction over
the sub(ect matter considering that the ultimate relie) that the 9ebes sought *as the
reconve4ance o) title and possession over t*o lots that had a total assessed value o)
less than P#$,$$$.$$. ?nder the la*,
said the 'C, it has (urisdiction over such
actions *hen the assessed value o) the propert4 e&ceeds P#$,$$$.$$,
(urisdiction shall be *ith the )irst level courts.
'he 'C concluded that the
9ebes should have )iled their action *ith the Municipal 'rial Court 1M'C2
o) 3ipolog Cit4.

!n August ##, #$$0 the 9ebes )iled a motion )or reconsideration.
pointed out that the 'C mista.enl4 classi)ied their action as one involving title to
or possession o) real propert4 *hen, in )act, it *as a case )or the annulment o) the
documents and titles that de)endant 9evilla got. 9ince such an action )or
annulment *as incapable o) pecuniar4 estimation, it s@uarel4 )ell *ithin the
(urisdiction o) the 'C as provided in 9ection "% o) Batas Pambansa "#%, as

'o illustrate their point, the 9ebes dre* parallelisms bet*een their case and
the cases o) De Rivera v. Halili
and Copioso v. Copioso.

'he De Rivera involved the possession o) a )ishpond. 'he 9upreme Court
there said that, since it also had to resolve the issue o) the validit4 o) the contracts
o) lease on *hich the opposing parties based their rights o) possession, the case
had been trans)ormed )rom a mere detainer suit to one that *as incapable o)
pecuniar4 estimation. ?nder epublic Act #%0 or the Audiciar4 Act o) "%6/, as
amended, civil actions, *hich *ere incapable o) pecuniar4 estimation, came under
the original (urisdiction o) the Court o) Birst +nstance 1no* the 'C2.
'he 9ebes
pointed out that, li.e De Rivera, the sub(ect o) their case *as Cincapable o)
pecuniar4 estimationD since the4 as.ed the court, not onl4 to resolve the dispute
over possession o) the lots, but also to rule on the validit4 o) the a))idavits o)
@uitclaim, the deeds o) con)irmation o) sale, and the titles over the properties.
'hus, the 'C should tr4 the case.

'he Copioso, on the other hand, involves the reconve4ance o) land the
assessed value o) *hich *as allegedl4 P7,<<$.$$. 'he 9upreme Court ruled that
the case comprehended more than (ust the title to, possession o), or an4 interest in
the real propert4. +t sought the annulment o) contracts, reconve4ance or speci)ic
per)ormance, and a claim )or damages. +n other *ords, there had been a (oinder o)
causes o) action, some o) *hich *ere incapable of pecuniary
estimation. Conse@uentl4, the case properl4 )ell *ithin the (urisdiction o) the
'C. Eere, petitioners argued that their case had the same causes o) actions and
relie)s as those involved in Copioso. 'hus, the 'C had (urisdiction over their

!n August 7", #$$0 the 'C denied the 9ebes=s motion )or reconsideration,
pointing out that the Copioso ruling had alread4 been overturned b4 pouses
Hu!uete v. pouses "mbudo.
Be)ore the Hu!uete, cancellation o) titles,
declaration o) deeds o) sale as null and void and partition *ere actions incapable o)
pecuniar4 estimation. No*, ho*ever, the (urisdiction over actions o) this nature,
said the 'C, depended on the valuation o) the properties. +n this case, the M'C
had (urisdiction because the assessed value o) the lots did not e&ceed P#$,$$$.$$.

The #ssue

'he issue in this case is *hether or not the 9ebes=s action involving the t*o
lots valued at less than P#$,$$$.$$ )alls *ithin the (urisdiction o) the 'C.

The Court$s Rulin!

>hether a court has (urisdiction over the sub(ect matter o) a particular action
is determined b4 the plainti))=s allegations in the complaint and the principal relie)
he see.s in the light o) the la* that apportions the (urisdiction o) courts.

'he gist o) the 9ebes=s complaint is that the4 had been the o*ner )or over 6$
4ears o) t*o unregistered lots
in 3ampalan, 9an Aose, 3ipolog Cit4, covered b4
'a& 3eclaration $"#-#7%, *ith a total assessed value o) P%,%"$.$$.
!n Aune 7,
"%%" de)endant 9evilla caused the 9ebes to sign documents entitled a))idavits o)
Being illiterate, the4 relied on 9evilla=s e&planation that *hat the4
signed *ere Cdeeds o) real estate mortgageD covering a loan that the4 got )rom
And, although the documents *hich turned out to be deeds conve4ing
o*nership over the t*o lots to 9evilla )or P"$,$$$.$$
*ere notariFed, the 9ebes
did not appear be)ore an4 notar4 public.
?sing the a))idavits o) @uitclaim,
de)endant 9evilla applied )or
and obtained )ree patent titles covering the t*o lots
on 9eptember #7, "%%".
9ubse@uentl4, he mortgaged the lots to de)endant
'echnolog4 and :ivelihood esource Center )or P/0%,555.$$.

!n 3ecember #6, "%%" the 9ebes signed deeds o) con)irmation o) sale
covering the t*o lots.
?pon closer e&amination, ho*ever, their signatures had
apparentl4 been )orged.
'he 9ebes *ere perple&ed *ith the reason )or ma.ing
them sign such documents to con)irm the sale o) the lots *hen de)endant 9evilla
alread4 got titles to them as earl4 as 9eptember.
At an4 rate, in "%%#, de)endant
9evilla declared the lots )or ta& purposes under his name.
'hen, using )orce and
intimidation, he seiFed possession o) the lots )rom their tenants
and harvested
that planting season=s 4ield
o) coconut and palay *orth P#$,$$$.$$.

3espite demands b4 the 9ebes, de)endant 9evilla re)used to return the lots,
)orcing them to hire a la*4er
and incur e&penses o) litigation.
Burther the
9ebes su))ered loss o) earnings over the 4ears.
'he4 *ere also entitled to
and e&emplar4 damages.
'he4 thus as.ed the 'C a2 to declare void
the a))idavits o) @uitclaim and the deeds o) con)irmation o) sale in the caseG b2 to
declare the 9ebes as la*)ul o*ners o) the t*o lotsG c2 to restore possession to themG
and d2 to order de)endant 9evilla to pa4 them P"6$,$$$.$$ in lost produce )rom
Aune 7, "%%" to the date o) the )iling o) the complaint, P7$,$$$.$$ in moral
damages, P"$$,$$$.$$ in attorne4=s )ee, P7$,$$$.$$ in litigation e&penses, and
such amount o) e&emplar4 damages as the 'C might )i&.

Based on the above allegations and pra4ers o) the 9ebes=s complaint, the la*
that applies to the action is Batas Pambansa "#%, as amended. +) this case *ere
decided under the original te&t o) Batas Pambansa "#% or even under its
predecessor, epublic Act #%0, determination o) the nature o) the case as a real
action *ould have ended the controvers4. Both real actions and actions incapable
o) pecuniar4 estimation )ell *ithin the e&clusive original (urisdiction o) the 'C.

But, *ith the amendment o) Batas Pambansa "#% b4 epublic Act <0$", the
distinction bet*een these t*o .inds o) actions has become pivotal. 'he
amendment e&panded the e&clusive original (urisdiction o) the )irst level courts to
include real actions involving propert4 *ith an assessed value o) less
than P#$,$$$.$$.

'he po*er o) the 'C under 9ection "% o) Batas Pambansa "#%,
to hear actions involving title to, or possession o), real propert4 or an4
interest in it no* covers onl4 real properties *ith assessed value in e&cess
o) P#$,$$$.$$. But the 'C retained the e&clusive po*er to hear actions the
sub(ect matter o) *hich is not capable o) pecuniar4 estimation. 'husH

9IC. "%. Jurisdiction in Civil Cases. % egional 'rial Courts shall
e&ercise e&clusive original (urisdiction:

1"2 +n all civil actions in *hich the sub(ect o) the litigations is
incapable o) pecuniar4 estimation.

1#2 +n all civil actions *hich involve the title to, or possession o), real
propert4, or an4 interest therein, *here the assessed value o) the propert4
involved e&ceeds '*ent4 thousand pesos 1P#$,$$$.$$2 or )or civil actions in
Metro Manila, *here such value e&ceeds Bi)t4 thousand pesos 1P5$,$$$.$$2
e&cept actions )or )orcible entr4 into and unla*)ul detainer o) lands or buildings,
original (urisdiction over *hich is con)erred upon the Metropolitan 'rial Courts,
Municipal 'rial Courts, and Municipal Circuit 'rial CourtsG & & &.

9ection 77, on the other hand provides that, i) the assessed value o) the real
propert4 outside Metro Manila involved in the suit is P#$,$$$.$$ and belo*, as in
this case, (urisdiction over the action lies in the )irst level courts. 'husJ

9IC. 77. Jurisdiction of &etropolitan Trial Courts' &unicipal Trial
Courts and &unicipal Circuit Trial Courts in Civil Cases -- Metropolitan 'rial
Courts, Municipal 'rial Courts and Municipal Circuit 'rial Courts shall e&ercise:

& & & &

172 I&clusive original (urisdiction in all civil actions *hich involve
title to, or possession o), real propert4, or an4 interest therein *here the assessed
value o) the propert4 or interest therein does not e&ceed '*ent4 thousand pesos
1P#$,$$$.$$2 or, in civil actions in Metro Manila, *here such assessed value does
not e&ceed Bi)t4 thousand pesos 1P5$,$$$.$$2 & & &.

But *as the 9ebes=s action one involving title to, or possession o), real
propert4 or an4 interest in it or one the sub(ect o) *hich is incapable o) pecuniar4

'he 9ebes claim that their action is, )irst, )or the declaration o) nullit4 o) the
documents o) conve4ance that de)endant 9evilla tric.ed them into signing and,
second, )or the reconve4ance o) the certi)icate o) title )or the t*o lots that 9evilla
succeeded in getting. 'he sub(ect o) their action is, the4 conclude, incapable o)
pecuniar4 estimation.

An action Cinvolving title to real propert4D means that the plainti))=s cause
o) action is based on a claim that he o*ns such propert4 or that he has the legal
rights to have e&clusive control, possession, en(o4ment, or disposition o) the same.
'itle is the Clegal lin. bet*een 1"2 a person *ho o*ns propert4 and 1#2 the
propert4 itsel).D

C'itleD is di))erent )rom a Ccerti)icate o) titleD *hich is the document o)
o*nership under the 'orrens s4stem o) registration issued b4 the government
through the egister o) 3eeds.
>hile title is the claim, right or interest in real
propert4, a certi)icate o) title is the evidence o) such claim.

Another *a4 o) loo.ing at it is that, *hile CtitleD gives the o*ner the right to
demand or be issued a Ccerti)icate o) title,D the holder o) a certi)icate o) title does
not necessaril4 possess valid title to the real propert4. 'he issuance o) a certi)icate
o) title does not give the o*ner an4 better title than *hat he actuall4 has in la*.
'hus, a plainti))=s action )or cancellation or nulli)ication o) a certi)icate o) title
ma4 onl4 be a necessar4 conse@uence o) the de)endant=s lac. o) title to real
propert4. Burther, although the certi)icate o) title ma4 have been lost, burned, or
destro4ed and later on reconstituted, title subsists and remains una))ected unless it
is trans)erred or conve4ed to another or sub(ected to a lien or encumbrance.

Nestled bet*een *hat distinguishes a CtitleD )rom a Ccerti)icate o) titleD is
the present controvers4 bet*een the 9ebes and de)endant 9evilla. >hich o) them
has valid title to the t*o lots and *ould thus be legall4 entitled to the certi)icates o)
title covering themK

'he 9ebes claim o*nership because according to them, the4 never
trans)erred o*nership o) the same to an4one. 9uch title, the4 insist, has remained
*ith them untouched throughout the 4ears, e&cepting onl4 that in "%%" the4
constituted a real estate mortgage over it in de)endant 9evilla=s )avor. 'he 9ebes
alleged that de)endant 9evilla violated their right o) o*nership b4 tric.ing them
into signing documents o) absolute sale, rather than (ust a real estate mortgage to
secure the loan that the4 got )rom him.

Assuming that the 9ebes can prove that the4 have title to or a right)ul claim
o) o*nership over the t*o lots, the4 *ould then be entitled, first, to secure
evidence o) o*nership or certi)icates o) title covering the same and, second, to
possess and en(o4 them. 'he court, in this situation, ma4 in the e&ercise o) its
e@uit4 (urisdiction and *ithout ordering the cancellation o) the 'orrens titles issued
to de)endant 9evilla, direct the latter to reconve4 the t*o lots and their
corresponding 'orrens titles to them as true o*ners.

'he present action is, there)ore, not about the declaration o) the nullit4 o) the
documents or the reconve4ance to the 9ebes o) the certi)icates o) title covering the
t*o lots. 'hese *ould merel4 )ollo* a)ter the trial court shall have )irst resolved
the issue o) *hich bet*een the contending parties is the la*)ul o*ner o) such lots,
the one also entitled to their possession. Based on the pleadings, the ultimate issue
is *hether or not de)endant 9evilla de)rauded the 9ebes o) their propert4 b4
ma.ing them sign documents o) conve4ance rather than (ust a deed o) real
mortgage to secure their debt to him. 'he action is, there)ore, about ascertaining
*hich o) these parties is the la*)ul o*ner o) the sub(ect lots, (urisdiction over
*hich is determined b4 the assessed value o) such lots.

Eere, the total assessed value o) the t*o lots sub(ect o) the suit
is P%,%"$.$$. Clearl4, this amount does not e&ceed the (urisdictional threshold
value o) P#$,$$$.$$ )i&ed b4 la*. 'he other damages that the 9ebes claim are
merel4 incidental to their main action and, there)ore, are e&cluded in the
computation o) the (urisdictional amount.